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Galapagos Deals Aim to Shore Up Drug Discovery

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A month after submitting an Investigational New Drug application for its lead candidate to the FDA, Belgian-owned small molecule and antibody discoverer Galapagos moved to strengthen its drug discovery technology service division through acquisition, while upgrading an existing facility into the center of a new third division focused on in vivo drug discovery.

Galapagos announced it was acquiring Cangenix, a provider of structure-based drug discovery technology, and integrating it with the hit finding and medicinal chemistry of Galapagos’ Argenta service division. Galapagos will pay £1 million ($1.6 million) up front, as well as up to £440,000 ($706,398) tied to achieving undisclosed milestones.

Cangenix’ team of four staff will join Argenta but continue to operate the platform in its premises in Canterbury, U.K., with the goal of securing a smooth transition of the business. Galapagos said the Cangenix acquisition will contribute to 2013 revenues and profit for Argenta, which will integrate all of the acquired company’s assets, know-how, personnel, and service contracts.

In a separate deal, Galapagos launched the new Fidelta service division, based at the Zagreb, Croatia, research site acquired in 2010 from GlaxoSmithKline. Since then, Galapagos has refocused the research site from internal to external outsourcing, creating a drug discovery service provider while using for its internal R&D programs the site’s existing capability of providing resources for research programs from discovery through clinical stages.

The Fidelta launch—tied to Croatia’s joining the European Union—creates a unit within Galapagos focused on in vivo pharmacology, toxicology, and inflammatory models. Fidelta will offer chemistry, pharmacology (both in vitro and in vivo), biomarker, toxicology, and ADME/PK capabilities, with specific experience in inflammation, infectious, metabolic, and oncology diseases. The Zagreb research center’s staff of 100 has worked to develop new drugs for GSK—which bought the former Pliva Research Institute in 2006—as well as Galapagos.

Fidelta joins Argenta and Galapagos’ other existing fee-for-service division, BioFocus. “With the creation of a third service division we can offer a broader range of services to our customers," Onno van de Stolpe, Galapagos’ CEO, said in a statement. "With this change we can further strengthen our worldwide leadership position in drug discovery services, ranging from target discovery all the way through to the delivery of preclinical candidates, in key disease areas for our clients."

The Cangenix and Fidelta deals come as Galapagos prepares for full-fledged clinical trials for its lead candidate GLPG0634, an orally-available, selective inhibitor of JAK1, for rheumatoid arthritis (RA) and potentially other inflammatory diseases. Last month, Galapagos opened its IND application for GLPG0634, for which the company said it intends to conduct a Phase I drug interaction study in the U.S. That study is expected to be completed in Q1. A six-month Phase IIb study is expected to start in Q2 2013, with top-line data expected in Q4 2014.

During Q1 of 2012, AbbVie’s branded-drug predecessor Abbott Laboratories and Galapagos signed a worldwide license agreement granting Abbott responsibility for further development and commercialization of GLPG0634 after Phase IIb. Abbott agreed to pay Galapagos $150 million up front, and a one-time $200 million fee upon successful completion of the RA Phase II studies that meet undisclosed preagreed criteria. Galapagos is also eligible for $1 billion tied to undisclosed developmental, regulatory, commercial, and sales-based milestones, plus tiered double-digit royalties on net sales upon commercialization. Galapagos retained co-promotion rights to the drug in Belgium, the Netherlands, and Luxembourg.

In a four-week Phase II study last November and an earlier such study in November 2011, GLPG0634 showed improvement in the signs and symptoms of rheumatoid arthritis and a unique safety profile. GLPG0634 is among four clinical, six preclinical, and 30 discovery programs Galapagos has in its development pipeline, for indications that include cystic fibrosis, inflammation, antibiotics, and metabolic disease.

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